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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M The appeal has been filed by the assessee. The relevant assessment year is 2008-09. The appeal is directed against the order of the learned CIT(A)
– 3 at Mumbai and arises out of assessment completed by the Assessing Officer (AO) under section 143(3) of the Income Tax Act 1961 (hereinafter ‘the Act’).
The sole ground raised by the assessee in this appeal is that the learned CIT(A) failed to consider the request for reduction of penalty to a minimum level of 100% against 300% levied by the AO.
The assessee is a doctor by profession. He had declared total income of Rs. 4,33,880/- for the impugned assessment year. The AO completed the assessment under section 143(3) of the Act, determining the income at Rs. 8,25,390/-. The addition included, apart from the disallowances of expenses, an amount of Rs. 2,03,258/- on account of interest received from savings account, FD account and RD account under the head income from other sources and Rs. 1,78,200/- being deposits in the savings bank account as unexplained cash credit under section 68 of the Act. Then the AO imposed maximum penalty @ 300% of tax sought to be evaded and it comes to Rs. 3,43,311/-. To arrive at this amount of Rs. 1,14,437/- the AO subtracted Rs. 82,180/- (the tax on total income excluding concealed income ) from Rs. 1,96,617/- ( tax on total income including concealed income)
The learned Counsel of the assessee pleaded that the penalty charged by the AO @300% is too harsh and the same be reduced to @100%.
The learned DR supported the order passed by the learned CIT(A) and AO.
After considering the rival submissions and perusing the relevant material on record, we find that the addition of Rs. 2,03,258/- made by the AO to the total income of the assessee consists of the following :
Source of Interest Amount(R) FDR 1,15,548/- RD Account 79,311/- SB Account 8,399/-
Total 2,03,258/- We also find that further addition of Rs. 1,78,200/- made by the AO as unexplained cash credit under section 68 consists of the following from the assesse’s saving bank account
Date Amount(R) Mode 05/05/2007 30,000/- Clearing 07/07/2007 30,000/- Clearing 02/11/2007 5,200 Clearing 06/11/2007 47,000/- Clearing 26/11/2007 36,000/- Cash 27/02/2008 30,000/- Clearing
Total 1,78,200/- 6.1 Also we find that no reason has been given by the AO in the penalty order dt. 27/06/2011 for imposing maximum penalty @300% of tax sought to be evaded.
In view of the facts and circumstances delineated hereinabove, we direct the AO to impose minimum penalty @ 100% of tax sought to be evaded which comes to Rs. 1,14,437/-.
In the result the appeal filed by the assessee is allowed. 8.
Order pronounced in the open court 24/08/2016